Pensions

Pensions

For most people, investing in a pension fund is the most effective way to build up a nest egg for their future. It provides financial security to allow you to enjoy your retirement. Just look at the benefits:

  • Generous tax relief
  • Tax-free investment returns
  • Opportunity to take a large part of your pension fund back as tax-free cash when you retire

So all you need now is to decide which type of pension is suitable for you, a good investment strategy and away you go!

The good news is that pension investing is not complicated – it’s actually quite simple. You just need to know what you’re doing. TAB Financial Services Ltd have over 25 years’ experience providing expert financial advice on achieving this goal.

Choosing the right pension

Whether you are employed or self-employed, moving jobs or getting close to retirement, there are a range of pensions to suit your specific needs.


I'm Self-Employed

PRSAs are individual Personal Retirement Savings Accounts (PRSA) which are a type of defined contribution scheme to which both regular and single contributions can be made.

Policies can be contributed to by all, regardless of employment status. Contributions can be made to the policy by an individual and/or their employer.

PRSAs are a flexible pension contract which allow the individual to carry their benefits from one employer to another and which provide the individual with the ability to increase, decrease or stop their contributions at any time without any penalty.

Standard PRSAs have a maximum fund management charge of 1% and a maximum contribution charge if 5%. Non-Standard PRSAs have no limit on charges applying to the policy.

You can continue to contribute to a PRSA after you retire, as long as you are not aged 75 or over.

Personal Pension policies are designed for those who are self-employed or who work in non-pensionable employment (meaning there is no employer pension scheme in your workplace), and who wish to save towards a more rewarding retirement. The policy is contributed to by the member.

Retirement can be taken between 60 to 75 years of age.


I've changed jobs

A Personal Retirement Bond (also known as a Buy Out Bond) is a single premium pension policy used to transfer a company pension scheme fund when leaving that employment.

The policy is issued in the name of the member. The previous employer and the pension Trustees have no further involvement.

Normal retirement can be taken from between 60 to 70 years of age, early retirement from age 50 onwards.



I'm Employed

PRSAs are individual Personal Retirement Savings Accounts (PRSA) which are a type of defined contribution scheme to which both regular and single contributions can be made.

Policies can be contributed to by all, regardless of employment status. Contributions can be made to the policy by an individual and/or their employer.

PRSAs are a flexible pension contract which allow the individual to carry their benefits from one employer to another and which provide the individual with the ability to increase, decrease or stop their contributions at any time without any penalty.

Standard PRSAs have a maximum fund management charge of 1% and a maximum contribution charge if 5%. Non-Standard PRSAs have no limit on charges applying to the policy.

You can continue to contribute to a PRSA after you retire, as long as you are not aged 75 or over.

Executive Pension policies are suitable for directors of limited companies, senior executives and employees who wish to invest towards their future & their retirement. The policy can be contributed to by the employer and/or the member themselves either through regular or single contributions.

Retirement can be taken between 60 and 70 years of age.

A Group Pension is a form of Defined Contribution pension scheme where the employer normally pays a specific percentage of the scheme member’s salary into a pension fund, and the employee is usually obliged to contribute a similar or smaller amount. The employer makes no promises about the size of the actual pension that will be paid upon retirement. Individual members have their own investment ‘account’.

I'm close to retirement

After you take your tax free cash you can use the balance of your fund to buy an annuity. An annuity provides you with a guaranteed pension income for the rest of your life.

When you buy an annuity you will have several options, including:

  • A guarantee of payment for up to 10 years. This means that if you die before the 10 years has passed, your pension will continue to be paid to your next of kin for the outstanding period;
  • Increasing your pension each year to take account of inflation;
  • Adding a spouse’s / civil partner’s pension so that if you die before them, they will receive a pension income for life.

The options you choose to include will affect the amount of pension income your fund can provide. You may use your fund to buy an annuity from any insurance company you choose.

Whether you have a personal pension, a PRSA, an additional voluntary contribution pension, a Defined Contribution company pension or a Buy Out Bond you may have additional options. You can choose to buy an annuity with all or some of your fund, but you also may have the option of investing in an Approved Retirement Fund or taking taxed cash.

Advantages of an Annuity:

  • Your income is guaranteed for the rest of your life.
  • Your income will not vary with changes in stock markets. Your level of income is certain.
  • You can build in a pension for your spouse or your dependents so that they have a guaranteed income if you die.

Approved Retirement Funds (ARFs) and Approved Minimum Retirement Funds (AMRFs) are funds managed by qualifying fund managers in which you can invest the proceeds of your pension fund when it matures.

After you have taken your tax-free lump sum, and before you can commence an ARF, €63,500 or the remainder of the pension fund if less, must be transferred to an AMRF or used to buy an annuity.

An AMRF differs from an ARF only to the extent that, until you are 75 years old, or you confirm that you are in receipt of a guaranteed pension income of €12,700 per annum, you may only withdraw maximum 4% per annum from the value of your AMRF.

When you reach age 75, or you confirm that you have become in receipt of the guaranteed pension income amount of €12,700 per annum for life, your AMRF will automatically become an ARF – and you will have the freedom to make unlimited withdrawals from it, as and when you please.

Any balance over €63,500, can be invested in an ARF or withdrawn as cash. Any cash withdrawn at this stage will be taxed as income.

Your AMRF will convert to an ARF on your death.

You do not have to invest in an AMRF if:

  • You have a guaranteed pension income of at least €12,700 per annum for life (all of your pensions and annuities including the Social Welfare Pension can be taken into account for this purpose); or
  • You are over age 75.

Advantages of the ARF / AMRF:

  • You have control and flexibility over how your retirement fund is invested.
  • Your fund can be invested in a wide range of funds, giving it the potential to continue to grow.
  • When you die, the value of your ARF / AMRF is passed on to your estate.
  • You have access to your money whenever you need it.
  • You can vary your level of regular income to suit your needs.


Talk to TAB Financial Services Ltd today about how to plan for your future.

  • Call us on +353 1 676 8633 or